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HappinessYou’ll learn
- Why unseen makes the economics
- How do fair policies benefit everyone
- What's the truth behind job creation
- Why are private loans a smarter choice
Table of contents
first KEY POINT
The knowledge of economics empowers you to look beyond the present into the future that very few can see
Economics is probably the most misunderstood field in the world. Even acclaimed experts on the subject still struggle to understand certain aspects of it. The dynamic nature of the subject makes it so, and it even gets worse because economics affects our greedy nature more than anything else. It's easy to study physics or maths or art without having it interfere with your emotions, but it's hard to make economic policies without looking to cut some material benefits for you or the group you represent.The interference of selfish interests accounts for why economic policies are constantly changing. If you study the economic history of your country, you will find that different policies have been enacted over time and most of these policies favor one group of the country while other groups suffer greatly from it.
An ideal economic policy should not only favor one group of people, it must prove to be in the best interest of the masses.
A very important metric for determining a good economic policy is its long term effect. You know a good or bad economist from the way he or she analyzes a policy. A bad economist sees only the short term benefits of a policy, but a good economist is able to analyze both the short and long term benefits of a policy then make his judgment based on his findings.As complex as it may seem, economics can be reduced to just one single lesson and that's what has been discussed in this chapter. To reiterate, when making economic policies, don't just consider the immediate benefits, look at the long term effects; and if the long term effects are good, verify to be sure they don't just favor one single group, but all groups.Did you know? Many classical economists made the mistake of focusing on just the long term benefits of their policies and it resulted in so many negativities. Economic policies must be beneficial both in the short and long terms.
second KEY POINT
Economic need only equals demand when there is sufficient buying power
Have you heard of the broken glass fallacy? It was first introduced in 1850 by economist Frédéric Bastiat in his essay titled “Ce qu'on voit et ce qu'on ne voit pas” (“That Which We See and That Which We Do Not See”).He used the essay to illustrate that the money people spend to recover from damage doesn't add any value to society. His broken glass parable was quite popular in the 19th and 20th centuries. Many versions of it have been told but the underlying lesson still remains the same. Imagine that a young boy was playing and he mistakenly threw a stone that broke a storekeeper's glass. It's a disaster but since the boy did it unintentionally, the storekeeper decides to pardon him. But he still has his glass to fix — something he didn't budget for. It's obviously a loss on his part since he didn't budget for it but the glazier gains because he would make profit from fixing the broken glass. The underlying question is this: is the broken glass scenario a blessing simply because someone gains from it?Many people — some economists included — believe it's an addition to society's wealth because the glazier gets a new customer. But this isn't so. It's actually a loss because the shopkeeper is using money he definitely budgeted for something else. Let's imagine it costs $200 to fix the window and he wanted to use that money to buy foodstuff. He would have had his store intact and his kitchen full of food items, but now it's not possible. He has to forgo stocking his kitchen to fix his shop, so it's definitely a loss.The storekeeper's demand increased due to damage, but nothing happened to his purchasing power.
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first KEY POINT
It's not economically wise to unevenly spend government money in the name of creating jobs
second KEY POINT
Private loans are economically better than government loans
third KEY POINT
Are you scared that AI and robotics will take your job? Don't be!
fourth KEY POINT
Conclusion
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Frequently asked questions
What is Economics in One Lesson about?
Economics in One Lesson, authored by Henry Hazlitt, provides a clear and insightful introduction to economic principles. It emphasizes the importance of understanding the long-term effects of economic policies on various groups, rather than only their immediate impact.
Is Economics in One Lesson worth reading?
Yes, Economics in One Lesson is definitely worth reading for anyone interested in economics. Its straightforward approach makes it accessible for beginners while also offering valuable insights for more experienced readers.
How many pages is Economics in One Lesson and when was it published?
Economics in One Lesson is approximately 256 pages long and was first published in 1946. It remains a highly regarded text in the field of economics, continually relevant to today's economic discussions.
What are the key takeaways from Economics in One Lesson?
Key takeaways from Economics in One Lesson include the importance of considering the unseen consequences of economic decisions and the necessity of evaluating how policies affect different segments of society. Hazlitt argues that good economic thinking can prevent disastrous government interventions.
Who is the author of Economics in One Lesson?
The author of Economics in One Lesson is Henry Hazlitt, a prominent economist and journalist known for his clear and engaging writing style that simplifies complex economic concepts.